Jul 22, 2009
Bad News for Foundations, Arts and Animals
A new study finds that tax incentives impact different types of charities differently
In a recent study, Michelle and Robert Yetman, associate professors of management at the University of California at Davis, investigated the affects of taxes on private giving to charities. The Yetmans found significant variances in the giving sensitivities to taxes across different types of charities. Because donors’ responses to tax incentives vary across different types of charities, changes to the charitable deduction (and tax incentives in general) will alter the relative mix of donations received by charities, creating winners (human services, public and social benefit and health charities) and losers (private foundations, private educational institutions, arts and culture, environmental and animal charities) These findings seem to challenge the administration’s position that limiting charitable deductions would raise revenue and cause donations to fall by little if at all.